A sign for $2.99 a gallon gasoline is seen as vehicles wait for a traffic light to turn green at a Hot Spot convenience store on the corner of Henry and Converse Streets on Friday, June 1, 2012 in Spartanburg, S.C. Oil prices plunged as bleak reports on U.S. job growth and manufacturing heightened worries about a slowing global economy. (AP Photo/Rainier Ehrhardt)

Business

Remember how oil prices threatened the recovery? Look at them now

The speed with which oil price paradigms can change is truly incredible. After a soaring rally that took off toward the end of 2011, crude oil prices began to slide in March and finally collapsed in May, falling more than 17% both in the U.S. and internationally. The rout is set to continue, as weak demand and a fading risk premium meet an oversupplied market.

Only a few months ago, investors were freaking out about ridiculously high oil prices. Fed Chairman Ben Bernanke was forced to acknowledge pain at the pump, and pundits called for actions to keep gas prices below $4 a gallon.

But, alas, prices have corrected substantially. In the U.S., benchmark WTI contracts fell drastically after having peaking above $110 per barrel in February, even clocking in a 20.6% decline in May. On Tuesday, WTI was selling for $84.22. International prices, captured by Brent contracts, slid from $128.40 on March 1 to $98.72, and could fall further.